Oil prices fell, yesterday, Friday, to record a weekly loss of about 5%, affected by expectations of weak global economic growth, raising interest rates, and anti-Covid-19 restrictions in China, which negatively affected demand, although the European Union is considering banning Russian oil imports.

Brent crude fell 1.6 percent to settle at $106.65 a barrel yesterday.

US West Texas Intermediate crude also fell 1.7% to settle at $102.07 a barrel.

The two benchmarks recorded weekly losses of about 5% each.

The price of Brent reached $139 a barrel last month, its highest level since 2008.

The International Monetary Fund this week lowered its forecast for global economic growth, while Federal Reserve Chairman Jerome Powell said Thursday that a half-point increase in the interest rate would be an option at the bank's next meeting in May.

“At this point, growth concerns in China and monetary tightening from the central bank limiting US growth seem to offset fears that Europe will soon expand sanctions on Russian energy imports,” said Jeffrey Haley, an analyst at Oanda.


 Chinese demand and production forecast

Expectations of demand from China - the world's largest oil importer - continued to pressure the market.

China announced new measures to combat Covid-19, including a daily examination, starting yesterday, to curb the latest outbreak of the disease in the country.

Baker Hughes Energy Services said, in a report on Friday, that the number of oil rigs - an early indicator of future production - increased by one to 549 over the week ending April 22, marking its highest level since April 2020.

The current support for prices comes from a lack of supplies after the disruption of production in Libya and its decline by 550,000 barrels per day, and supplies could decrease further if the European Union imposed an embargo on Russian oil.

The Netherlands said yesterday that it intends to stop using Russian fossil fuels by the end of the year.

On the other hand, the German Central Bank "Bundesbank" warned Friday that if the European Union imposes an immediate embargo on Russian gas, the cost of this measure to Germany will be high, as it could reach 5% of GDP this year.

EU member states are deeply divided over the issue of a ban on Russian oil and gas imports, since Russian forces began their war on Ukraine on February 24.

Morgan Stanley raised its forecast for third-quarter Brent crude by $10 a barrel to $130, while attributing it to a "larger deficit" this year due to lower supply from Russia and Iran, which is likely to outweigh the impact of lower demand in the short term.